Bank Reconciliation The bank reconciliation made by Thurman, Inc., on August 31 showed: Deposit in transit of $1,170 Outstanding checks no.597 $650 no.603 $710 The reconciled cash balance on August 31 was $14,110 The following bank statement is available for September: Bank Statement TO Thurman, Inc. September 30 St. Louis, MO STATE BANK Date Deposits No. Date Charges Date Balance Aug. 31 $14,300 Sept. 1 $1,170 597 Sept. 1 $650 Sept. 1 14,820 2 1,120 607 5 1,850 2 15,940 5 850 608 5 1,100 5 13,840 9 744 609 8 640 8 13,200 15 585 610 9 552 9 13,392 17 1,540 611 15 817 15 13,160 25 1,028 612 17 488 17 14,212 30 680 614 25 920 25 14,320 NSF 29 991 29 13,329 SC 30 36 30 13,973 , , Item codes EC: Error Correction DM: Debit Memo CM: Credit Memo SC: Service Charge OD: Overdraft RT: Returned Item IN: Interest Earned NSF: Non-sufficient Funds A list of deposits made and checks written during September is shown below: Deposits Made Checks Written Sept. 1 $1,120 No. 607 $1,850 4 850 608 1,100 8 744 609 640 12 585 610 552 16 1,540 611 871 24 1,028 612 488 29 680 613 310 30 1,266 614 920 $7,813 615 386 616 420 $7,537 The Cash in Bank account balance on September 30 was $14,386. In reviewing checks returned by the bank, the accountant discovered that check No. 611 written for $817 for advertising expense, was recorded in the cash disbursements journal as $871. The NSF check written for $991, which Thurman deposited on September 24, was a payment on account from customer D. Walker. Required a. Prepare a bank reconciliation for Thurman, Inc., at September 30. b. Prepare the necessary journal entries to bring the Cash in Bank account into agreement with the reconciled cash balance on the bank reconciliation. Bank reconciliation Journal entries THURMAN, INC. Bank Reconciliation September 30 Answer Answer Answer Answer Answer Answer Add: Check No. 611 for Answer Answer recorded as Answer Answer Answer Less: Outstanding checks (list in numerical order) Less: NSF Check of D. Walker Answer Check no. Amount 603 Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer General Journal Date Description Debit Credit Sept 30 Answer Answer Answer Answer Answer Answer To correct error in recording check 611. 30 Answer Answer Answer Answer Answer Answer To reclassify NSF check as an accounts receivable. 30 Answer Answer Answer Answer Answer Answer To record bank service charge.

Bank Reconciliation The bank reconciliation made by Thurman, Inc., on August 31 showed: Deposit in transit of $1,170 Outstanding checks no.597 $650 no.603 $710 The reconciled cash balance on August 31 was $14,110 The following bank statement is available for September: Bank Statement TO Thurman, Inc. September 30 St. Louis, MO STATE BANK Date Deposits No. Date Charges Date Balance Aug. 31 $14,300 Sept. 1 $1,170 597 Sept. 1 $650 Sept. 1 14,820 2 1,120 607 5 1,850 2 15,940 5 850 608 5 1,100 5 13,840 9 744 609 8 640 8 13,200 15 585 610 9 552 9 13,392 17 1,540 611 15 817 15 13,160 25 1,028 612 17 488 17 14,212 30 680 614 25 920 25 14,320 NSF 29 991 29 13,329 SC 30 36 30 13,973 , , Item codes EC: Error Correction DM: Debit Memo CM: Credit Memo SC: Service Charge OD: Overdraft RT: Returned Item IN: Interest Earned NSF: Non-sufficient Funds A list of deposits made and checks written during September is shown below: Deposits Made Checks Written Sept. 1 $1,120 No. 607 $1,850 4 850 608 1,100 8 744 609 640 12 585 610 552 16 1,540 611 871 24 1,028 612 488 29 680 613 310 30 1,266 614 920 $7,813 615 386 616 420 $7,537 The Cash in Bank account balance on September 30 was $14,386. In reviewing checks returned by the bank, the accountant discovered that check No. 611 written for $817 for advertising expense, was recorded in the cash disbursements journal as $871. The NSF check written for $991, which Thurman deposited on September 24, was a payment on account from customer D. Walker. Required a. Prepare a bank reconciliation for Thurman, Inc., at September 30. b. Prepare the necessary journal entries to bring the Cash in Bank account into agreement with the reconciled cash balance on the bank reconciliation. Bank reconciliation Journal entries THURMAN, INC. Bank Reconciliation September 30 Answer Answer Answer Answer Answer Answer Add: Check No. 611 for Answer Answer recorded as Answer Answer Answer Less: Outstanding checks (list in numerical order) Less: NSF Check of D. Walker Answer Check no. Amount 603 Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer Answer General Journal Date Description Debit Credit Sept 30 Answer Answer Answer Answer Answer Answer To correct error in recording check 611. 30 Answer Answer Answer Answer Answer Answer To reclassify NSF check as an accounts receivable. 30 Answer Answer Answer Answer Answer Answer To record bank service charge.

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter5: Internal Control And Cash

Section: Chapter Questions

Problem 5.5.1C

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Question

Bank Reconciliation

The bank reconciliation made by Thurman, Inc., on August 31 showed:

Deposit in transit of		$1,170
Outstanding checks	no.597	$650
	no.603	$710
The reconciled cash balance on August 31 was		$14,110

The following bank statement is available for September:

Bank Statement
TO		Thurman, Inc.		September 30
		St. Louis, MO		STATE BANK
Date	Deposits	No.		Date	Charges		Date	Balance
									Aug.	31	$14,300
Sept.	1	$1,170	597		Sept.	1	$650		Sept.	1	14,820
	2	1,120	607			5	1,850			2	15,940
	5	850	608			5	1,100			5	13,840
	9	744	609			8	640			8	13,200
	15	585	610			9	552			9	13,392
	17	1,540	611			15	817			15	13,160
	25	1,028	612			17	488			17	14,212
	30	680	614			25	920			25	14,320
			NSF			29	991			29	13,329
			SC			30	36			30	13,973
										,	,
Item codes	EC: Error Correction		DM: Debit Memo		CM: Credit Memo
		SC: Service Charge		OD: Overdraft		RT: Returned Item
		IN: Interest Earned		NSF: Non-sufficient Funds

A list of deposits made and checks written during September is shown below:

Deposits Made		Checks Written
Sept.	1	$1,120	No.	607	$1,850
	4	850		608	1,100
	8	744		609	640
	12	585		610	552
	16	1,540		611	871
	24	1,028		612	488
	29	680		613	310
	30	1,266		614	920
		$7,813		615	386
				616	420
					$7,537

The Cash in Bank account balance on September 30 was $14,386. In reviewing checks returned by the bank, the accountant discovered that check No. 611 written for $817 for advertising expense, was recorded in the cash disbursements journal as $871. The NSF check written for $991, which Thurman deposited on September 24, was a payment on account from customer D. Walker.

Required
a. Prepare a bank reconciliation for Thurman, Inc., at September 30.
b. Prepare the necessary journal entries to bring the Cash in Bank account into agreement with the reconciled cash balance on the bank reconciliation.

Bank reconciliation
Journal entries

THURMAN, INC. Bank Reconciliation September 30
Answer	Answer	Answer	Answer
Answer	Answer	Add: Check No. 611 for	Answer
	Answer	recorded as	Answer	Answer
	Answer
Less: Outstanding checks (list in numerical order)		Less: NSF Check of D. Walker	Answer
	Check no.	Amount
	603	Answer		Answer	Answer	Answer
	Answer	Answer
	Answer	Answer
	Answer	Answer	Answer
Answer	Answer	Answer	Answer

General Journal
Date	Description	Debit	Credit
Sept	30	Answer	Answer	Answer
		Answer	Answer	Answer
		To correct error in recording check 611.
	30	Answer	Answer	Answer
		Answer	Answer	Answer
		To reclassify NSF check as an accounts receivable.
	30	Answer	Answer	Answer
		Answer	Answer	Answer
		To record bank service charge.

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